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Business Studies · May / June 2023 · Paper 21 · Question 1

0450

As printed in the paper

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  • 1(a)[8]

    Explain four barriers to communication for a business. One mark for each barrier (max 4). Award a maximum of one additional mark for each explanation of the barrier. There are no application marks available. Reasons could include:

    Problems with the sender – the language used is not clear/use of jargon or technical terms so do not understand instructions
    The message is too long/too much detail is included in the message – so the main meaning of the message may be lost in the detail
    Problems with the medium/method – the wrong medium is used such as putting an urgent message on a noticeboard so may not be seen immediately
    Computer failure/internet connection/technology fails – the message may not be received
    No feedback is given – so the sender is unaware the message has not been received
    Problems with the receiver – if a meeting is used and it goes on a long time then the receiver may stop listening
    The channel/chain of command may be too long – too many people through which the message is sent it may be distorted
    Language differences – hinder understanding of the message For example: Problems with the sender (1)

    they may use language that includes jargon or technical terms so do not understand instructions (1).

  • 1(b)[12]

    Consider the following two ways VP can purchase its inventory. Which way should it use? Justify your answer.

    Head Office purchases the inventory for all the restaurants.
    Restaurant Managers purchase their own inventory from local suppliers. Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of both ways. Well-justified recommendation. Candidates discussing both ways in detail, in context and with a well-justified recommendation including why the alternative way is rejected should be rewarded with the top marks in the band. 9–12 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least one way. Judgement with some justification/some evaluation of choices made. Candidates discussing at least one way in detail and applying it to the case should be rewarded with the top marks in the band. 5–8 Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss the ways with little/no explanation. Simple judgement with limited justification/limited evaluation of choices made. Candidates outlining both ways in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: Head office purchases the inventory for all the restaurants
    Able to make bulk purchases – discounts received – lowering variable costs/lower unit cost of food ingredients - possibly reducing prices/increasing profit
    Easier to standardise the meals/control quantity and quality of ingredients in different restaurants as all the inventory come from the same food suppliers - maintains reputation for good quality fast food
    Increased transport costs for food ingredients to be taken to each fast-food restaurant Warehouse storage is required for inventory before it is sent out to each restaurant – increases costs Restaurant Managers purchase their own inventory from local suppliers
    Managers can order different ingredients for meals to meet local tastes – increases demand/improved competitiveness – increases revenue
    Local suppliers can deliver more frequently and quickly – ensures ingredients will be fresh – improves reputation of the restaurants
    Managers may feel more motivated/trusted – if allowed to make some decisions and order their own ingredients
    May be unable to meet sudden increase in demand for specific meals – if ingredients are not available – may lose customers as disappointed – lose reputation/customers do not return
    Restaurant Managers are very busy - so may not have the time to order ingredients
    Some ingredients may not be available locally to each restaurant - limiting the availability of the full menu in some restaurants Recommendation Justification might include:
    All inventory is purchased by head office is the best way for VP to choose as this will allow considerable cost savings due to purchasing economies of scale. This will allow VP to keep prices low and to be more competitive with other similar restaurants, possibly increasing revenue. Ordering only from local suppliers may make it difficult to meet customer demand as food ingredients may run out if local suppliers are small.
    Each Restaurant Manager purchases their own inventory is the best way to choose because each restaurant can meet local demand, and this will attract more customers leading to higher revenue. Also the costs of storage are lower as smaller quantities can be purchased so profit from selling fast-food will be higher.
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